Air Force awards $9 billion contract to Boeing for new training jets

Boeing beats Lockheed for $9.2-billion Air Force trainer program

Darryl Davis president of Boeing Phantom Works reveals Boeing's proposed T-X Trainer aircraft in 2016

The service is initially issuing a contract for $813 million, including engineering and manufacturing development.

Boeing and Saab designed a new jet for the program.

KAI had pitched to supply the T-50A, an improved version of the training aircraft T-50 used by South Korea's Air Force.

Boeing management offered a clean-sheet design, went all-in and was so confident of a win that it put a photo of the two T-X flying prototypes on the cover of the company's 2017 annual report, released earlier this year.

The trainer award was the second that Boeing received this week in which it beat Lockheed in head-to-head competition. And on August 30, Boeing won the Navy's MQ-25 unmanned carrier-launched tanker contract.

On Monday, Boeing was awarded a job valued at as much as $2.38 billion for as many as 84 new helicopters to guard intercontinental ballistic missile sites in Montana, Wyoming and North Dakota. [SNC] and Lockheed Martin's Sikorsky subsidiary. The company said its group lost because Boeing's bid was lower. For Lockheed Martin and Leonardo, "there are limits to what a company that doesn't have that enormous commercial side and volume is willing to do", he said. In other words, Boeing is assuming a lot of risk. Leonardo submitted a version of its M-346. Both aircraft are now training jet fighter pilots in countries around the globe.

"This new aircraft will provide the advanced training capabilities we need to increase the lethality and effectiveness of future Air Force pilots", Secretary of the Air Force Heather Wilson said in the statement. "That allows you move into a competition where you're targeting an industry base where there's going to be fierce competition", he said.

The U.S. Air Force announced Thursday that Boeing Co.

In a statement, Air Force secretary Heather Wilson touted the cost savings achieved through the award, noting that initial estimates had pegged the cost of the program at nearly $20 billion.

Boeing did not immediately respond to a request for comment.

For Boeing's Arlington, Virginia, based defense business, the award caps off a stunning winning streak.

Sandy Morris, an equity analyst with Jefferies United International, said that the T-X contract award will "move the goalposts" for subcontractor Saab, with financial improvements expected by the mid-2020s. According to Defense News, the $9.2 billion figure for the new deal would come into play if the Air Force decides to buy 475 planes.

The service's target date for reach initial operational capability with the T-X is 2024.

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